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Groundfloor (company)

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GROUNDFLOOR Finance Inc.
IndustryCrowdfunded real estate investing
Founded2013
Founders
  • Brian Dally
  • Nick Bhargava
HeadquartersBank of America Plaza,
Atlanta, Georgia
,
U.S.A.
Key people
  • Brian Dally (CEO)
  • Nick Bhargava (EVP)
ServicesReal estate peer-to-peer lending
Number of employees
50 (2018)
Websitegroundfloor.com

Groundfloor is an American real estate investing and lending marketplace. It was the first real estate crowdfunding company to achieve SEC qualification utilizing Regulation A+ since the regulation became operable through the JOBS Act.[1]

Groundfloor was purposely built to serve self-directed investors instead of institutional ones. By October 2018, Groundfloor had loaned more than $70 million across over 500 properties in the United States and had fundraised $13.8 million.[2][3]

In August 2021, the company had surpassed 100,000 registered users and $510M in total investment sales.[4]

History

Groundfloor was founded in Raleigh, North Carolina, in February 2013 by Brian Dally (who launched Republic Wireless) and Nick Bhargava (contributor to the JOBS Act).[5] In March 2014, the company raised $300,000 from angel investors in the region.[6] After raising $1 million in seed funding, Groundfloor moved its headquarters to Atlanta because of the Invest Georgia Exemption (IGE)[7] which allows state residents to invest in crowdfunded projects regardless of their investor accreditation status.[8][9]

In August 2015, Groundfloor became the first real estate crowdfunding company to achieve SEC qualification under Regulation A+, since the regulation became operable through the JOBS Act.[1][10] The company subsequently opened investing in California, Illinois, Maryland, Massachusetts, Texas, Virginia, Washington, Georgia and the District of Columbia in the fall of 2015.[11] By late October, Groundfloor sold out every loan originally listed.[12] By December, the company had funded 54 loans and sold more than $3 million in Limited Recourse Obligation securities. It also closed a $5 million Series A round, bringing its total financing to $7.5 million.[10] The round was led by Fintech Ventures, a $100 million venture capital investment fund focused on innovation in non-bank lending, savings and smart payments, managed by Serguei Kouzmine. Groundfloor announced it would use the money to expand its business beyond the present nine states where it operates.[13]

In 2017, Groundfloor originated $30 million in loans.[14] By October 2018, the company had loaned more than $70 million across 500 properties in the United States,[2] one third of which are in Atlanta.[15] Following $4.2 million secured from 2304 investors during the 2017-18 campaign, as of October 2018 the company had fundraised $13.8 million.[3] It ended 2019 with $100 million in annual investment volume raised $22 million in funds raised, with 3,200 public investors.[16][17] By March 2021, the company updated its fundraising total to $26 million after raising funds through SeedInvest.[18]

Groundfloor was named to the Inc 5000 list of fastest growing companies, ranking #402.[19][20] It also appeared in the Deloitte’s Technology Fast 500 List, ranking #102.[21][22]

Platform

Groundfloor was purposely built to serve self-directed investors instead of institutional investors.[1] Its marketplace provides short-term, high-yield returns backed by real estate. Typical loans return 12 percent annually on a six-to-12-month term.[10] In November 2015, Groundfloor 2.0 was introduced, reducing the minimum investment to $10.[1]

Groundfloor targets residential-development projects.[23] They use a proprietary loan grading algorithm in addition to application review to assign a loan a letter grade and corresponding rate. Loan terms generally range from six to 12 months and financing can be in a senior or junior position.[8][24]

In October 2015, Groundfloor introduced two new tools that expand peer-to-peer lending of real estate: quick comparison of loans and in-depth analysis of loan grading factors.[12] Groundfloor launched Notes, which is similar to publicly issued, non-traded secured debt.[25] In September 2021, the company launched the mobile application, Stairs.[26][27]

See also

References

  1. ^ a b c d Ryan Lichtenwald (2015-09-12). "GROUNDFLOOR Is Breaking New Ground With The World's First Regulation A+ Deal". Lend Academy. Retrieved 10 December 2018.
  2. ^ a b "Crowdfunding startup says its loans will help ease Triangle's housing crunch". News & Observer. 31 October 2018. Retrieved 2018-12-10.
  3. ^ a b "Groundfloor CEO Brian Dally Opines on IPO Results, Growth & Platform Updates". Crowdfundinsider.com. 20 September 2018. Retrieved 2018-12-11.
  4. ^ GmbH, finanzen net. "GROUNDFLOOR introduces 'Savesting' with Stairs, a new kind of app making it easier than ever to save and invest". markets.businessinsider.com. Retrieved 2021-11-19.
  5. ^ Rebecca Grant (30 May 2013). "Groundfloor unveils 'Lending Club for real-estate' so you can get richer, faster (exclusive)". Venture Beat. Retrieved 10 December 2018.
  6. ^ Catherine Clifford (1 April 2014). "Crowdfunding's Next Hot Frontier: Real Estate". Entrepreneur. Retrieved 2018-12-10.
  7. ^ "Rule 590-4-2-.08 - Invest Georgia Exemption". Rules and Regulations of the State of Georgia. Retrieved 2018-12-10.
  8. ^ a b Deborah Gage (19 August 2014). "Groundfloor Raises $1M, Moves to Georgia to Crowdfund Real Estate". Wall Street Journal. Retrieved 2018-12-10.
  9. ^ Bevington, Rickey (2015-11-10). "Company tests new waters for small-scale investors". Marketplace.org. Retrieved 10 December 2018.
  10. ^ a b c Kiki Roeder (2015-12-11). "GROUNDFLOOR High Rises with $5M Series A, First of New $100M Fintech Ventures Fund". Hypepotamus. Retrieved 2018-12-10.
  11. ^ "Form 1-A". United States Securities and Exchange Commission. Retrieved 10 December 2018.
  12. ^ a b Samantha Hurst (26 October 2015). "Groundfloor Announces Three New Tools to Expand Peer-to-Peer Real Estate Lending". Crowdfund Insider. Retrieved 2018-12-10.
  13. ^ Philip Ryan (2015-12-15). "Real Estate Service Groundfloor to Expand Footprint with $5M Raise". Bank Innovation. Retrieved 2018-12-10.
  14. ^ Beth Mattson-Telg (2018-05-08). "CRE Crowdfunding Firms Continue to Scale Up Platforms". National Real Estate Investor. Retrieved 10 December 2018.
  15. ^ "Home flipping once again on the rise in metro Atlanta". Atlanta Journal Constitution. 2018-08-22. Retrieved 2018-12-10.
  16. ^ "Groundfloor's new app Stairs lets investors in for $1". Inman. Retrieved 2021-11-19.
  17. ^ Wheatley, Mike (2018-10-03). "GROUNDFLOOR, a crowdfunding lending platform, raises $4.2M in funding". RealtyBizNews: Real Estate News. Retrieved 2021-11-19.
  18. ^ "21 STARTUPS TO WATCH IN 2021". www.bizjournals.com. Retrieved 2021-11-19.{{cite web}}: CS1 maint: url-status (link)
  19. ^ "Check out GROUNDFLOOR on Inc.com". Inc.com. Retrieved 2021-05-18.
  20. ^ "Introducing the 5,000 Fastest-Growing Private Companies in America". Inc.com. Retrieved 2020-08-12.
  21. ^ "GROUNDFLOOR Ranks No. 102 on Deloitte's 2020 Technology Fast 500™ List". finance.yahoo.com. Retrieved 2021-05-18.
  22. ^ "Atlanta startup Groundfloor is using its platform to fight gentrification". www.bizjournals.com. Retrieved 2021-05-18.{{cite web}}: CS1 maint: url-status (link)
  23. ^ Laura Baverman (28 April 2014). "Groundfloor stretches crowd-funding's limits". USA Today. Retrieved 2018-12-10.
  24. ^ Rebecca Burns (8 May 2014). "Crowd lending: Groundfloor makes real estate investing accessible". Atlanta Magazine. Retrieved 2018-12-10.
  25. ^ "What are GROUNDFLOOR Notes?". support.groundfloor.us. Retrieved 2021-11-19.
  26. ^ "Welcome to Stairs!". stairsapp.com. Retrieved 2021-11-19.
  27. ^ "Groundfloor Launches Stairs App to Make Investing in Real Estate Even Easier". Vincent. Retrieved 2021-11-19.
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